Letter: Deeply Flawed Commentary
To the Editor:
The column by E. J. Dionne (“Conservatives Are in Thrall to Discredited Political Thinking,” Feb. 18) contains errors and false assumptions, not the least of which is its misleading headline. The subject is one of economic policy, not politics. Furthermore, Austrian economics is anything but discredited.
One glaring falsehood is the notion that the boom which followed World War II was due to government spending and intervention. In reality, many sources stipulate that the post-war boom was a predictable result of several inter-related private-sector factors: One, increased consumer demand brought about by four years of rationing and deferred consumption. Two, U.S. factories that were already humming were able to quickly retool to meet demand for automobiles, housing, et al. Three, many nations — with manufacturing capacity crippled by war — had tremendous demand for the goods that America produced. Four, returning veterans provided the labor needed by American manufacturers.
Dionne seems intent on discrediting the life’s work of two of the great economic minds of the 20th century, Ludwig von Mises (who authored at least 29 books) and his protege, Fredrich von Hayek. Those men experienced the European rise of socialism and brought erudite economic analysis to their observations, perhaps best condensed into Hayek’s seminal work, The Road to Serfdom, a book so powerful that it was banned by the former Soviet Union. Dionne ignores Hayek’s Nobel prize for what one source called his “pioneering work in the theory of money and economic fluctuations and … penetrating analysis of the interdependence of economic, social and institutional phenomena.”
Far from being discredited, the Austrian school of economics has made numerous contributions to current mainstream economic thought and practice. Many noted modern economists accept the conclusions which Mises and Hayek developed over a lifetime of economic research and analysis.
With his deeply flawed commentary Dionne discredits only himself.